Three separate court rulings this week dealt major blows to gig companies seeking to avoid making their contractors into employees in accordance with a California Supreme Court ruling and the state law AB 5.
On Monday, a Los Angeles federal judge denied Uber and Postmates’ request to halt the implementation of AB 5 while their lawsuit challenging the constitutionality of the law plays out. That lawsuit includes many pointed, personal attacks against Assemblywoman Lorena Gonzalez, who the company argues maliciously singled out gig companies for punishment.
District Judge Dolly Gee largely rejected those arguments: “Instead of negating every conceivable basis for AB 5’s exemptions, Plaintiffs argue that the statute is ‘inexplicable by anything but animus toward the class it affects,’” Gee wrote, “But that argument is plainly belied by the expansive language of the statute, which applies to ‘a person providing labor or services for remuneration,’ unless that person meets the ABC test or satisfies an exemption.”
Meanwhile, in San Diego, a lawsuit working in the other direction is underway: San Diego’s city attorney is the first to challenge a gig company’s classification of its workers. The office has filed suit against Instacart, arguing it doesn’t meet any of the three parts of the “ABC” test laid out in the Supreme Court’s Dynamex ruling.
San Diego Superior Court Judge Timothy Taylor has issued a tentative ruling mostly siding with the city attorney’s office.
“The policy of California is unapologetically pro-employee (in the several senses of that word). Dynamex is explicitly in line with this policy. While there is room for debate on the wisdom of this policy, and while other states have chosen another course, it is noteworthy that all three branches of California have now spoken on this issue,” Taylor wrote. “The Supreme Court announced Dynamex two years ago. The decision gave rise to a long debate in the legal press and in the Legislature. The Legislature passed AB 5 last fall. The Governor signed it. To put it in the vernacular, the handwriting is on the wall.”
The ruling is not yet final; a hearing on the matter is set for Friday afternoon.
“This tentative ruling creates yet more uncertainty and fear for hundreds of thousands of app-based drivers who are worried they’re going to lose their ability to earn income on their terms as independent contractors, said Stacey Wells, spokeswoman for the Protect App-Based Drivers & Services coalition, in a statement. “It underscores the need for our ballot measure, which protects app-based driver freedom and flexibility, and prevents the loss of hundreds of thousands of jobs.”
And, rounding out the trio, a San Francisco-based ruling against DoorDash is an exercise in being careful what you wish for.
Doordash forced its delivery drivers to sign arbitration agreements – meaning they forfeit their right to go to court to enforce their rights, and instead must pursue any grievances in a private system that’s been shown to overwhelmingly favor employers.
Now those employees want to challenge – you guessed it – their worker classification status.
The judge in the case called the company’s bluff, and said that it can indeed enforce the arbitration agreements but that it must arbitrate more than 5,000 cases and pay all the workers’ costs. That could add up to millions of dollars before any of the workers’ claims are even decided on.
The judge’s order is about as scathing as they come:
“The employer here, DoorDash, faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order.”
“Add in the cost of paying for lawyers to represent them in each proceeding, plus the amount the company will have to pay to the workers in each proceeding that it loses, and DoorDash is likely to wind up paying far more money than it would have if it hadn’t tried to strip away many of its workers’ rights,” Vox notes.
Instacart has similarly argued in the San Diego case that the city attorney’s case against it should be moot because its workers signed arbitration agreements. Taylor was wary of that claim in a hearing last week because the workers aren’t the ones who brought the case forward – the city attorney is.
- Republican Sen. John Moorlach introduced a bill this week to exempt Uber and Lyft drivers from AB 5.
- Gonzalez introduced a new bill this week aimed at food delivery apps like DoorDash and Postmates that would allow the platforms to share customers’ information with the restaurants providing the food, so the restaurants can develop relationships with customers. It would also prohibit restaurants from being offered on delivery apps without a prior agreement in place. The San Francisco Chronicle recently revealed a number of restaurants in the city had been listed on food delivery apps without their knowledge.
Faulconer Touts His Plans for Statewide Homelessness Solutions
Mayor Kevin Faulconer is taking his pitch for state homelessness reforms on the road.
Faulconer gave a keynote address at a symposium on Thursday hosted by the USC Schwarzenegger Institute and Price Center for Social Innovation arguing the state must zero in on policies he believes have hampered the state’s response.
“For our cities to turn the corner on homelessness, we also need to fix state laws,” said Faulconer, who went on to describe his newly launched Rebuilding the California Dream committee.
Faulconer said he has started assembling a group that will support state and local ballot measures that “decrease homeless, increase public safety, grow the economy and clean up public spaces and the environment.”
The mayor, who is also rumored to be eyeing a run for governor, said he is in the early stages of an effort to craft a 2022 statewide ballot initiative focused on homelessness. He did not elaborate on what that initiative might entail but has repeatedly criticized criminal justice reform Propositions 47 and 57.
“(Prop. 47) turned cocaine, heroin and methamphetamine into a slap on the wrist and then Prop. 57 labeled the Public Safety and Rehabilitation Act doubled down on this approach,” Faulconer said Thursday. “If you think someone who’s addicted to drugs and sleeping in a canyon is going to turn their life around without an intervention, you’re not being honest. These are cries for help and folks are not going to change without consequences for their actions.”
Before his speech, host and former Gov. Arnold Schwarzenegger said his conversations with the San Diego mayor helped inspire the Thursday symposium that also included panels and speeches by officials including federal Housing and Urban Development Secretary Ben Carson and Los Angeles Mayor Eric Garcetti.
- Earlier in the week, the Legislative Analyst’s Office criticized Gov. Gavin Newsom’s spending plan to address homelessness. The report says the spending plan lacks a clear strategy, and therefore “is less likely to make a meaningful ongoing impact on the state’s homelessness crisis.”
– Lisa Halverstadt
How Gloria, Jones and Hueso Are Balancing Campaigning and Legislating
Assemblyman Todd Gloria and Sens. Brian Jones and Ben Hueso are all running for separate offices while holding down their posts in Sacramento, which can be tricky considering politicians can’t campaign while on the people’s time.
With just a few months left in Sacramento, Gloria, a candidate for San Diego mayor, said he hopes to revisit a bill that would target billions of unused funds generated by the Mental Health Services Act, a tax on personal income in excess of $1 million.
He’s reintroduced the bill twice since 2018.
“I’m going to make another run at it again this year because I think in the midst of this crisis we’re dealing with, we should use every resource we have to help these folks,” he said.
In 2018, Gloria proposed directing those funds toward homeless services, a population disproportionately affected by mental illness.
Even with the increased workload of running a campaign while legislating, Gloria said its nothing he isn’t used to.
So far Gloria has also announced a bill to ban retail sales of pets, and plans to re-introduce a bill clarifying how long government agencies must retain emails in accordance with the Public Records Act.
“It’s a lot less sleep and a lot more work, but that’s OK,” Gloria said.
Jones, a candidate for the 50th Congressional District, has focused much of his Sacramento attention on efforts to repeal AB 5, including a proposal to exempt music industry professionals.
“Musicians and music industry professionals are clearly freelance occupations, yet under AB 5 for each ‘gig’ a musician or producer books, the hirer must add them to their payroll as an employee and start paying fees such as unemployment insurance,” Jones said in a press release.
Jones also announced a bill this week that would crack down harder on people who steal packages from porches of homes.
He said balancing his job as a legislator with his campaign will become a lot harder come summer.
“We’re starting to do committees and stuff right now in Sacramento, but really the intense part of the Sacramento schedule is March through June, and then August,” Jones said.
A campaign spokesperson for Hueso, who is running for the County Board of Supervisor’s District 1, said he was not available for interviews this week, but Hueso recently told KUSI that he’s been busy with a bill that would give tax exemptions to veterans.
– Bella Ross
Golden State News
- Gov. Gavin Newsom signed a new law taking immediate effect that will allow voters to change political parties up through Election Day without being forced to cast a provisional ballot. (KRCR)
- A young Latina activist was elected mayor of a small city outside Los Angeles – just before a Delta jet dumped fuel on schoolchildren in her town. (Los Angeles Times)
- It’s Valentine’s Day, so let this story of a retiree who stepped in to save California’s oldest weekly newspaper warm your heart. (New York Times)
- After this LAist/KPCC investigation of a Southern California slumlord dropped, Assemblywoman Buffy Wicks vowed to re-introduce a bill to create a statewide rental registry.
- Criminal justice reformers have their sights set on the Los Angeles district attorney’s race. (HuffPost)
- A McClatchy paper has a characteristically well-reported piece on … McClatchy’s bankruptcy filing, which will end the family control of one of the country’s biggest newspaper chains. (Sacramento Bee)